Should we pay for bad renters?

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A proposed change to theft laws will further strap local governments, clog underfunded courts and may disproportionally impact low-income Iowans.

The VCR player once part of your entertainment center was long ago discarded, but the state law it inspired plays on and may be expanded.

Nearly two decades ago, video business owners had a problem: People were renting and not returning. Lawmakers’ solution was an expansion of theft laws. Video store owners could pursue civil penalties against deadbeat renters, as well as get police involved.

Lawmakers are revisiting the VCR theft law to expand it again for all “equipment rental property” — giving rental store owners access to both civil relief and criminal prosecution. Under Senate File 403, the original retail price of the rental property (not fair-market value) is used to determine severity.

Failure to return items originally worth $10,000 or more could lead to a Class C felony conviction, a fine of up to $10,000 and up to 10 years in prison. Keeping an item worth $200 or less would be prosecuted as a simple misdemeanor, which carries fines of up to $625 and up to 30 days in jail. There are five levels of theft in the bill — two felonies, three misdemeanors.

Lobbyists for the Iowa Retail Federation and the Iowa-Nebraska Farm Equipment Dealers Association have given a nod to the bill, which was passed 49-0 in the Iowa Senate and is now in the House Judiciary Committee.

A major problem with the bill is lack of a clear definition for “equipment rental property.” Does the word “equipment” refer only to mechanical devices like farm implements or power tools? Does it include household goods like computers, sofas and televisions? The bill doesn’t say.

In Iowa, rental companies, like loan companies, currently rely on agreement wording and civil courts to recoup losses. The companies will continue to have these options if SF 403 becomes law — and, unlike loan companies, they’ll be able to pursue criminal prosecutions.

Generally, people rent when they need short-term access or they cannot afford to buy. And within the rent-to-own industry, people pay huge amounts to make payments over time. These consumers are typically lower-income, without access to credit cards and other options. They take on 78 weeks worth of $30 payments, shelling out about $2,400 for items that can be purchased for less than half that price.

Companies profit not only from markups, but from their ability to repeatedly lease returned merchandise. Still, it will be taxpayer funds, not corporate profits, that take a hit when companies prosecute their customers.

Will an Iowan unable to manage a small weekly payment be able to post bail or retain a criminal attorney?

Granting criminal prosecutions means taxpayers will be on the hook for law enforcement expenses, local jail resources and public defenders. As a bonus prize, Iowa communities will have more residents with criminal records struggling to find jobs and housing.

This theft law expansion is less useful than a VCR, and far more expensive.

• Comments: @LyndaIowa, (319) 339-3144, lynda.waddington@thegazette.com

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